The UK Civil Aviation Authority (CAA) is warning customers who have forward bookings with Lowcostholidays Ltd to carefully consider their options following the company’s announcement that it is moving its business to Spain.

The CAA was notified of Lowcostholidays intention to move their business to Spain late on Wednesday 30 October. The transfer occurred at midnight on 31 October. In view of the very short notice we were given of this change, we are unable to confirm for passengers what protection arrangements apply to their bookings. We are still carefully assessing the situation to ensure that UK consumers’ rights are protected.

Although Lowcostholidays contacted all customers with forward bookings, offering them the option of cancelling their booking and receiving a full refund or continuing with their booking under the new arrangements, their letter was lengthy and unclear, and only gave customers seven days to decide. The CAA believes that customers are not being offered sufficient time to consider the situation and make the best choice.

Andy Cohen, Head of ATOL, said: “By giving the regulator such short notice of these changes and failing to allow their customers reasonable time to consider their situation, Lowcostholidays’ behaviour is unacceptable. We simply cannot say at this point what the changes might mean in practice for consumers, and for that reason think that anyone with a Lowcostholidays booking should very carefully consider their options.”

Lowcostholidays have told their customers that by moving the business to Spain, the ATOL certificates they have previously issued are no longer valid. The Spanish company is not subject to financial oversight and licensing from the UK Civil Aviation Authority. Lowcostholidays state that financial protection will now be through the Spanish authorities. The CAA has not been able to confirm what protection applies in the limited time available to us, but will update consumers as a matter of urgency.

The CAA’s ATOL scheme ensures consumers are protected from holiday company failure, and if their company fails they can finish their holiday and return to the UK as planned – or get their money back if they haven’t yet travelled. It is vital that consumers who are not covered by ATOL are given clear information on how their money is protected and what to do if something goes wrong.

Consumers now have seven days to decide if they are happy for their holiday to be transferred to the new company, or would like a refund. The CAA advises them to carefully consider their options on the basis of the information made available to them.

1. Lowcostholidays currently have around 250,000 ATOL-protected bookings annually. Their ATOL number is 6516.2. The Air Travel Organiser’s Licence (ATOL) protects people against the risk of their travel company going bust: ensuring they can continue their holiday and return home safely if the company collapses whilst they are away; or providing refunds if they’re yet to travel.3. Run by the UK Civil Aviation Authority on behalf of the Government, ATOL covers the traditional package holiday, some individual flights and holidays known by the industry as ‘Flight-Plus’. A ‘Flight-Plus’ booking is one that includes a flight plus accommodation and/or car hire, so long as these separate parts of the holiday are booked with the same company and within a day of each other. 4. The CAA is the UK's specialist aviation regulator. Its regulatory activities range from making sure that the aviation industry meets the highest technical and operational safety standards to preventing holidaymakers from being stranded abroad or losing money because of tour operator insolvency.